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Tuesday, 06 September 11
INDONESIAS PROPOSED COAL EXPORT BAN MAY HAVE IMPACT ON THE INDIAN POWER SECTOR - DIPESH DIPU
.jpg) COALspot.com - This is a special interview about Indonesian proposed coal export ban by 2014, with Mr. Dipesh Dipu, Director of Deloitte Touche Tohmatsu, India.
The Indonesian government is currently in the process of drafting a new regulation that could ban the export of low-grade coal by January 12, 2014. This is likely to apply to coal below 5700 kcal/kg on air dried basis in value.
As of now Indonesia is producing around 150 million tons of coal with calorific value below 5700 GAD (according to chairman of Indonesian coal mining association). However by 2014, there are possibilities the total production of below 5700 GAD coal may reach more than 200 million per annum.
Will Indonesian coal export ban impact on the Indian fuel requirements?
The earlier grade of coal that was being considered for proposed ban has GCV of 5100 kcal/kg of less (adb), which can be comparable to 3800-4200 kcal/kg (arb) domestic coal available in India. This grade of coal has found favor in India primarily due to likely price advantage but economics of power generation based on such grade of imported coal may be a suspect. This considering that such grades of coal from Indonesia typically have high moisture content, which makes transportation cost per unit of energy generated higher. The quantum of the low grade of coal (<5100 kcal/kg adb) procured from Indonesia is likely to remain relatively low.
However, if the new definition of low grade coal is applied (<5700 kcal/kg adb), it may be reasonable to believe that such a ban may have impact on the Indian power sector as volumes in this grade of coal are expected to rise in the proportion of coal exports to India. Several of the acquisitions made by Indian power generation companies in Indonesia have been in coal blocks that will produce coal of this grade, and a blanket ban on the exports can jeopardize power plant development in India.
On the other hand, the domestic Indonesian market may not be prepared to consume all the coal mined of this grade in view of the power generation capacity addition plans in Indonesia. In such a case, the coal mine development is likely to be deferred. The Indonesian law makers may need to reconsider domestic market demand, investment climate in coal sector and impact of the legislation on the export revenues.
What is the alternative source for Indian power industry if the proposed coal export ban come into effect by 2014?
Indian power generation companies have been forced to look out for coal assets abroad due to the investment and regulatory environment within the country. India boasts of more than 110 billion tonnes of coal reserves, which largely fall within a 300 meters of depth. If the regulatory and investment environment is amended to allow greater participation of private sector Indian dependence on imports will be reduced.
However, for imports, India will continue to look at Indonesia, South Africa, Australia and newer destinations like Mozambique and Columbia. But these sources also have constraints, domestic demands in South Africa is likely to restrict quantum jump in exports out of South Africa. Indonesia has also proposed domestic market obligations. Mozambique may have infrastructure constraints for large volumes of coal being transported from Tete province to ports of Maputo, Ncala or Beira. Australian coal is of high quality but may have higher costs of mining and transport.
What would be the additional cost if Indian consumers switch their sourcing origin from Indonesia?
Indonesia has competitive advantage due to its geographical closeness. However, on a per tonne basis, assuming comparable quality, costs of transport may make marginal difference when compared with South Africa and Mozambique.
When compared to Australian coal, due to the high quality, cost of energy may well be comparable even though shipping costs are higher. Between Indonesian coal (5500 kcal/kg adb priced at USD 90 per tonne) and Australian coal (6500 kcal/kg adb priced at USD 120 per tonne), indicative variable cost difference of power generation may be about Indian Rupees 0.20 to 0.30 per kWh (electricity unit) in favor of Indonesian coal.
Will it affect Indian economy growth or this coal export ban is ignorable as India can easily identify alternative sources of fuel?
The magnitude of growth in power generation in India will necessarily mean that coal will remain the mainstay. Natural gas has had issues of availability. Nuclear plant development is facing socio-political challenge in view of the risks of technology failure. Development of hydel power has also faced issues of land acquisition, rehabilitation & resettlement apart from the technical issues of hydro-geological features. Renewable sources such as solar and wind generation are still projected to constitute a small portion of India power generation mix. Identifying an alternative source that can match coal in its accessibility, availability and affordability in the context of scale of capacity addition required in India is a challenge.
What is the Indian government's role on this issue, whether government has to come out with the solution such as easing Indian mining and environment law, open up mining for foreigners, G2G arrangement, etc…?
There is a need to look at domestic sources with pro-active and constructive approach and make all necessary legal and statutory amendments that make the resources available and mineable. Easing the regulations may not be one of such measures but making those regulations work in sync with each other in a time bound and predictable manner must certainly be.
There is certainly a case for opening the domestic coal sector for private participation, including independent miners, and for foreign participation so that newer technology and enhanced scale of operations are implemented in India. The regulation also needs to permit risk capital to come in for prospecting and exploration.
For imports the G2G relations can be leveraged to secure coal assets. India has good relationship with Indonesia and has also signed a tax treaty with Mozambique in 2010 which will facilitate investments. Government may also engage with these countries to ease exports to India and extend fiscal support to coal mining companies investing in mining and associated infrastructure development.
About Dipesh Dipu
Dipesh Dipu works as Director with Deloitte Touche Tohmatsu India Pvt. Ltd in the Energy and Resources consulting practice of the firm and anchors the Firm’s initiative in the mining and metals sectors.
He is a mining engineering graduate from Indian School of Mines and is a Chartered Financial Analyst (CFA). He has also done executive program in business management from Indian Institute of Management Calcutta. Dipesh has recently been awarded the Abheraj Baldota Gold Medal for the Young Mining Engineer of the Year 2007 by the Mining Engineers’ Association of India in recognition of his contributions in the improvement of mining industry in India.
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Thursday, 28 July 16
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Tuesday, 26 July 16
NORTH P&I CLUB EXPLAINS HOW TO AVOID CLAIMS FOR SELF-COOKING SOYA BEANS
KNOWLEDGE TO ELEVATE
North P&I Club has advised its members to be extra vigilant during loading and transport of soya beans to ensure they ...
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- Tamil Nadu electricity Board
- Aditya Birla Group - India
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- Offshore Bulk Terminal Pte Ltd, Singapore
- Bangladesh Power Developement Board
- OPG Power Generation Pvt Ltd - India
- Coal and Oil Company - UAE
- Energy Development Corp, Philippines
- Port Waratah Coal Services - Australia
- Bukit Makmur.PT - Indonesia
- Ind-Barath Power Infra Limited - India
- Straits Asia Resources Limited - Singapore
- ASAPP Information Group - India
- Indian Oil Corporation Limited
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bukit Baiduri Energy - Indonesia
- India Bulls Power Limited - India
- Coastal Gujarat Power Limited - India
- Salva Resources Pvt Ltd - India
- Electricity Generating Authority of Thailand
- Parry Sugars Refinery, India
- Videocon Industries ltd - India
- Binh Thuan Hamico - Vietnam
- TNB Fuel Sdn Bhd - Malaysia
- Edison Trading Spa - Italy
- Kaltim Prima Coal - Indonesia
- International Coal Ventures Pvt Ltd - India
- Borneo Indobara - Indonesia
- Sarangani Energy Corporation, Philippines
- Australian Commodity Traders Exchange
- Cigading International Bulk Terminal - Indonesia
- McConnell Dowell - Australia
- Jorong Barutama Greston.PT - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- MS Steel International - UAE
- Maharashtra Electricity Regulatory Commission - India
- Minerals Council of Australia
- Energy Link Ltd, New Zealand
- Romanian Commodities Exchange
- Georgia Ports Authority, United States
- Deloitte Consulting - India
- Miang Besar Coal Terminal - Indonesia
- Gujarat Sidhee Cement - India
- Indian Energy Exchange, India
- GAC Shipping (India) Pvt Ltd
- South Luzon Thermal Energy Corporation
- Pipit Mutiara Jaya. PT, Indonesia
- PTC India Limited - India
- SMG Consultants - Indonesia
- Indika Energy - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Goldman Sachs - Singapore
- Riau Bara Harum - Indonesia
- Simpson Spence & Young - Indonesia
- San Jose City I Power Corp, Philippines
- Renaissance Capital - South Africa
- Directorate Of Revenue Intelligence - India
- Gujarat Mineral Development Corp Ltd - India
- Kartika Selabumi Mining - Indonesia
- Merrill Lynch Commodities Europe
- Billiton Holdings Pty Ltd - Australia
- Economic Council, Georgia
- Metalloyd Limited - United Kingdom
- Meralco Power Generation, Philippines
- Mercator Lines Limited - India
- Mintek Dendrill Indonesia
- Africa Commodities Group - South Africa
- Neyveli Lignite Corporation Ltd, - India
- Power Finance Corporation Ltd., India
- Sojitz Corporation - Japan
- Posco Energy - South Korea
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Alfred C Toepfer International GmbH - Germany
- Mjunction Services Limited - India
- Vizag Seaport Private Limited - India
- The Treasury - Australian Government
- Agrawal Coal Company - India
- CIMB Investment Bank - Malaysia
- Sakthi Sugars Limited - India
- Essar Steel Hazira Ltd - India
- Sree Jayajothi Cements Limited - India
- PowerSource Philippines DevCo
- Kumho Petrochemical, South Korea
- Ministry of Transport, Egypt
- Jaiprakash Power Ventures ltd
- Carbofer General Trading SA - India
- Leighton Contractors Pty Ltd - Australia
- IHS Mccloskey Coal Group - USA
- Dalmia Cement Bharat India
- SN Aboitiz Power Inc, Philippines
- Bhatia International Limited - India
- Central Electricity Authority - India
- Malabar Cements Ltd - India
- LBH Netherlands Bv - Netherlands
- Central Java Power - Indonesia
- Rio Tinto Coal - Australia
- Wilmar Investment Holdings
- Altura Mining Limited, Indonesia
- Chettinad Cement Corporation Ltd - India
- Medco Energi Mining Internasional
- Oldendorff Carriers - Singapore
- Holcim Trading Pte Ltd - Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Coalindo Energy - Indonesia
- The State Trading Corporation of India Ltd
- Antam Resourcindo - Indonesia
- PNOC Exploration Corporation - Philippines
- Maheswari Brothers Coal Limited - India
- Anglo American - United Kingdom
- Bhushan Steel Limited - India
- Iligan Light & Power Inc, Philippines
- Kideco Jaya Agung - Indonesia
- Indonesian Coal Mining Association
- Bhoruka Overseas - Indonesia
- Star Paper Mills Limited - India
- Thai Mozambique Logistica
- Samtan Co., Ltd - South Korea
- Kepco SPC Power Corporation, Philippines
- Therma Luzon, Inc, Philippines
- Wood Mackenzie - Singapore
- Kalimantan Lumbung Energi - Indonesia
- Aboitiz Power Corporation - Philippines
- Ministry of Finance - Indonesia
- Jindal Steel & Power Ltd - India
- Petron Corporation, Philippines
- Makarim & Taira - Indonesia
- Singapore Mercantile Exchange
- Krishnapatnam Port Company Ltd. - India
- CNBM International Corporation - China
- TeaM Sual Corporation - Philippines
- Indogreen Group - Indonesia
- Planning Commission, India
- Electricity Authority, New Zealand
- Bahari Cakrawala Sebuku - Indonesia
- Sical Logistics Limited - India
- Heidelberg Cement - Germany
- GVK Power & Infra Limited - India
- SMC Global Power, Philippines
- Siam City Cement - Thailand
- Karaikal Port Pvt Ltd - India
- Trasteel International SA, Italy
- Attock Cement Pakistan Limited
- Price Waterhouse Coopers - Russia
- Thiess Contractors Indonesia
- Globalindo Alam Lestari - Indonesia
- Kobexindo Tractors - Indoneisa
- ICICI Bank Limited - India
- Australian Coal Association
- London Commodity Brokers - England
- Directorate General of MIneral and Coal - Indonesia
- New Zealand Coal & Carbon
- Kohat Cement Company Ltd. - Pakistan
- Cement Manufacturers Association - India
- Madhucon Powers Ltd - India
- Ministry of Mines - Canada
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Eastern Coal Council - USA
- VISA Power Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Formosa Plastics Group - Taiwan
- Semirara Mining Corp, Philippines
- Sindya Power Generating Company Private Ltd
- Banpu Public Company Limited - Thailand
- Orica Australia Pty. Ltd.
- GMR Energy Limited - India
- Interocean Group of Companies - India
- Marubeni Corporation - India
- Baramulti Group, Indonesia
- Orica Mining Services - Indonesia
- Savvy Resources Ltd - HongKong
- Independent Power Producers Association of India
- Parliament of New Zealand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kapuas Tunggal Persada - Indonesia
- Bharathi Cement Corporation - India
- Barasentosa Lestari - Indonesia
- Timah Investasi Mineral - Indoneisa
- Ambuja Cements Ltd - India
- Uttam Galva Steels Limited - India
- Meenaskhi Energy Private Limited - India
- Toyota Tsusho Corporation, Japan
- Indo Tambangraya Megah - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Pendopo Energi Batubara - Indonesia
- IEA Clean Coal Centre - UK
- Gujarat Electricity Regulatory Commission - India
- Eastern Energy - Thailand
- GN Power Mariveles Coal Plant, Philippines
- Chamber of Mines of South Africa
- AsiaOL BioFuels Corp., Philippines
- Bayan Resources Tbk. - Indonesia
- Larsen & Toubro Limited - India
- Standard Chartered Bank - UAE
- Sinarmas Energy and Mining - Indonesia
- Ceylon Electricity Board - Sri Lanka
- The University of Queensland
- Siam City Cement PLC, Thailand
- Rashtriya Ispat Nigam Limited - India
- Commonwealth Bank - Australia
- Global Coal Blending Company Limited - Australia
- White Energy Company Limited
- Vedanta Resources Plc - India
- Bulk Trading Sa - Switzerland
- Tata Chemicals Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Xindia Steels Limited - India
- Latin American Coal - Colombia
- European Bulk Services B.V. - Netherlands
- Intertek Mineral Services - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Grasim Industreis Ltd - India
- Global Green Power PLC Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Global Business Power Corporation, Philippines
- Lanco Infratech Ltd - India
- Mercuria Energy - Indonesia
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